Defence Secretary George Robertson and the defence ministers of
France, Germany, Italy, Spain and Sweden will tonight set out a
plan of action to help Europe's defence industry restructure to
meet the challenge of competition from the United States.

The six ministers will sign a Letter of Intent at Lancaster House,
London, which provides a framework for developing concrete and
practical measures which Governments can take to assist the
industry-led restructuring process.

George Robertson said:

'This Letter of Intent which I am signing with my colleagues from
the main defence industrial nations of Europe is a major
achievement which sends out a strong signal of our determination to
drive forward the process of European defence industrial
rationalisation.

'Defence industry in Europe is fragmented. There is over-capacity
in many sectors and too much duplication of effort. Without
restructuring, it will not be strong enough to survive in a market
dominated by the American giants.

'Although it is primarily for industry to lead the rationalisation
process, there is much that Governments can, and should, do. This
Letter of Intent is not a panacea. But it represents an important
step forward, one that I am confident will receive the full backing
of industry.

'It is vitally important that European defence and aerospace
companies seize the opportunity to come together to create viable
companies capable of providing competition for their American
counterparts.'

The Letter of Intent will be signed this evening by Mr Robertson,
Alain Richard of France, Volker Ruhe of Germany, Beniamino
Andreatta of Italy, Eduardo Serra of Spain and Bjorn von Sydow of
Sweden.

It identifies some of the potential obstacles to restucturing in
six key areas, and possible means of removing them. Expert working
groups will now be established to carry the work forward. Precise
solutions to the problems identified will be set out in separate
arrangements or agreements.

The key areas are:

Security of Supply: ensuring that countries can depend on each
other to provide necessary defence equipment if restructuring
means equipment production is concentrated in other partner
countries.

Export Procedures: ensuring that companies will be able to
export major systems that include sub-systems manufactured in
other partner nations.

Security of Information: ensuring that classified information
is protected when it is passed to a newly formed joint company.

Research and Technology: cutting down wasteful research
duplication between countries.